You may have heard in the news recently that tax is being made to go digital. There have been plenty of awareness campaigns about this in the media, whether that be via newspapers, television advertisements, or radio campaigns. It is a big thing. That said, there appears to be a big problem – not everybody truly understands how making tax digital will affect them, so here we are to try and explain it to you.
Making Tax Digital, or MTD to give it its short form, is an HMRC initiative that is designed to revolutionise the UK tax system and bring an end to the rigours of self-assessment.
The reason for MTD is, primarily, to make tax administration easier for taxpayers whilst at the same time reducing the overheads that HMRC currently work with when managing tax affairs.
So, if you are going to be part of this change, what are the implications of making tax digital to you? Read on to find out more:
Firstly, MTD is going to mean that your business will need to complete quarterly returns rather than annual ones.
Secondly, you will have a ‘real time’ view of your tax, making it easier for you to keep up to date and plan ahead.
Thirdly, you will have to ensure that you are using a system that integrates with HMRC’s at the same time to allow a smooth transfer of details.
Fourth, as a result of Making Tax Digital, if you are a VAT registered business you WILL be required to submit your VAT returns via the MTD System as of April 2019 so if you do fall into this category you actually don’t have all that much time to go before it kicks in.
These are the main four implications of making tax digital at the moment, and by making yourself ready for MTD, you should have the ability to manage payments through a more accurate and efficient system, and also have greater visibility of your taxes.
If you’re still struggling to fully understand the implications that Making Tax Digital will have for you, there are plenty of sources of information available on the internet for you to browse through, but if you want to find somewhere that you can get all the information you need in one place then head over to https://www.mtdfvat.co.uk where you will have all the information at the disposal at the click of a button.
Be smart, get savvy with MTD today.